London close: Gains erased as Fed chair gives cautious outlook
UK stocks reversed earlier gains to trade broadly flat by the close on Friday, as comments from Federal Reserve chair Jerome Powell at the closely watched Jackson Hole conference dampened risk appetite.
The FTSE 100 finished the session up just 0.15% at 7,345, well below the daily high of 7,389 reached before Powell's speech at 1500 BST.
At the three-day conference of global central bankers, Powell said the Fed would "proceed carefully" on any future rate hikes, but warned that signs of stronger growth may warrant further monetary tightening.
“Two months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said. “There is substantial further ground to cover.”
Market analyst Axel Rudolph from trading platform IG said the speech was “a bit of a damp squib as [Powell] tried to please both doves and hawks”.
Watches of Switzerland sinks
Shares in FTSE 250-listed Watches of Switzerland slumped by a fifth after news that Rolex had bought jeweller Bucherer AG. “Investors seem to fear the tie-up will mean Bucherer gets preferential treatment including better access to the watches that consumers are desperate to buy,” Russ Mould, investment director at AJ Bell, said.
On the top-tier index, Tesco was putting in a decent performance after Barclays raised its target price for the stock from 320p to 325p ahead of the retailer's first-half results next month. The bank said: "We think Tesco may well raise full-year retail EBIT/free cash flow guidance (even with a cautious view of how 2H may evolve)."
Rival supermarket J Sainsbury also outperformed the market, while mining stocks were limiting gains for the Footsie, with Endeavour Mining, Fresnillo and Antofagasta finishing lower.
Financial trading platform CMC Markets also dropped after saying that annual net operating income would be lower than last year as revenues continued to fall in a "challenging" environment.
Aston Martin Lagonda rallied after Jefferies lifted its stance on the shares to ‘buy’ from ‘hold’ and hiked the price target to 420p from 300p, saying the operating outlook appears "more encouraging than ever".
Market Movers
FTSE 100 (UKX) 7,344.72 0.15%
FTSE 250 (MCX) 18,131.02 -0.35%
techMARK (TASX) 4,225.86 -0.07%
FTSE 100 - Risers
Tesco (TSCO) 260.10p 1.92%
Smurfit Kappa Group (CDI) (SKG) 3,148.00p 1.81%
Melrose Industries (MRO) 509.60p 1.55%
Sainsbury (J) (SBRY) 262.20p 1.39%
Intertek Group (ITRK) 4,133.00p 1.37%
CRH (CDI) (CRH) 4,508.00p 1.37%
Centrica (CNA) 146.70p 1.31%
Smiths Group (SMIN) 1,589.00p 1.15%
Smith (DS) (SMDS) 293.20p 1.14%
Airtel Africa (AAF) 110.90p 1.09%
FTSE 100 - Fallers
Endeavour Mining (EDV) 1,625.00p -2.75%
Fresnillo (FRES) 549.40p -2.14%
International Consolidated Airlines Group SA (CDI) (IAG) 157.90p -1.56%
Prudential (PRU) 946.80p -1.44%
Johnson Matthey (JMAT) 1,543.00p -1.34%
Ocado Group (OCDO) 741.80p -1.17%
Taylor Wimpey (TW.) 109.30p -1.09%
Scottish Mortgage Inv Trust (SMT) 655.00p -0.97%
Hargreaves Lansdown (HL.) 753.60p -0.92%
Auto Trader Group (AUTO) 587.00p -0.91%
FTSE 250 - Risers
Aston Martin Lagonda Global Holdings (AML) 338.40p 5.49%
3i Infrastructure (3IN) 301.00p 2.56%
SDCL Energy Efficiency Income Trust (SEIT) 75.80p 2.43%
FirstGroup (FGP) 144.00p 2.27%
W.A.G Payment Solutions (WPS) 91.00p 2.25%
Me Group International (MEGP) 155.60p 1.97%
Hays (HAS) 105.30p 1.94%
Digital 9 Infrastructure NPV (DGI9) 54.20p 1.88%
Mitie Group (MTO) 93.60p 1.63%
Senior (SNR) 175.80p 1.62%
FTSE 250 - Fallers
Watches of Switzerland Group (WOSG) 554.00p -20.12%
CMC Markets (CMCX) 110.20p -9.67%
Coats Group (COA) 72.00p -4.00%
TUI AG Reg Shs (DI) (TUI) 469.60p -2.81%
Pennon Group (PNN) 623.00p -2.81%
Centamin (DI) (CEY) 87.60p -2.77%
Direct Line Insurance Group (DLG) 157.40p -2.75%
easyJet (EZJ) 412.40p -2.74%
WH Smith (SMWH) 1,419.00p -2.54%
Currys (CURY) 47.76p -2.53%